SIG to meet gross profit expectations for 2013

9th Jan 2014 08:52

Revenues rose four per cent during 2013, building products distributor SIG said Thursday, boosted by favourable exchange rates. As such, full-year profit before tax is expected to be at least £85.8m, in line with market expectations. The group said trading improved as the year progressed, with like-for-like (LFL) sales up 2.5% in the second half, having declined 3.5% in the first, due to poor weather conditions. Overall, LFL sales dropped 0.5%, with mainland Europe down 1.5%, and the UK and Ireland up around 1%. During the second half, the company identified a further £5m of cost savings, giving total savings for the year of around £9m, of which 40% were realised in 2013. The total exceptional charge for the year on the closure of Builders Express is expected to be around £19m. Looking forward, the company said: "SIG expects construction activity in the UK residential market to remain buoyant, with the non-residential sector continuing to be subdued. In Mainland Europe construction markets are anticipated to remain variable. "The trading outlook, operational efficiency savings and an expected modest net benefit from its strategic initiatives give the Group confidence in achieving good progress in 2014. "Looking further ahead [...] the group expects meaningful payback from its strategic initiatives from 2015 onward, with a cumulative net annual benefit target of around £30m by 2016."Year-end net debt is expected to total around £120m. NR